By Michael Sharvin
As attorneys, we are often asked questions about how real property is held and conveyed in the Cayman Islands. Below are the answers to some of the most common questions we are asked.
How is property held in the Cayman Islands?
There are very few restrictions when it comes to holding property in the Cayman Islands. Property can be held by individuals in their personal names, by a trust or by domestic and foreign companies.
What is the difference between owning a property as joint proprietors or tenants in common?
If a property is owned as joint proprietors, this means that each proprietor owns an equal share in a property and if one proprietor dies, the property will automatically pass to the other proprietor. Married couples often hold properties as joint proprietors. If a property is held as tenants in common, it means that two or more people co-own the property in defined shares that they can dispose of as they wish. There is no right of survivorship where property is held as tenants in common.
What legal documents do you typically see when dealing with the sale and purchase of a residential property and how are they signed?
In a typical transaction, there is a contract, transfer and legal charge. There are often ancillary documents such as a stay of registration (which freezes the title to the land prior to closing) and a discharge form (discharging the seller's existing mortgage). Contracts are signed "under hand," which means the parties signing simply sign their names or, in the case of corporate entities, a director (or authorised signatory) will sign on behalf of a company. Transfers and legal charges are always signed as a deed. In the case of an individual signing in his/her own name, he/she should sign in front of an independent witness who should physically witness the individual signing the deed. In the case of a corporate entity signing, it will largely depend on what the company's memorandum and articles say, but most deeds are usually signed by either two directors or a director and secretary on behalf of the company. Again, the signatures of the directors and company secretary should be witnessed by an independent witness.
Is title insurance needed when buying properties in the Cayman Islands?
Unlike the United States, title insurance is not available when purchasing residential property in the Cayman Islands. We recommend that buyers appoint a lawyer to review the title to a property, undertake the necessary enquiries and advise on any title issues.
What happens following completion of a property purchase?
The transfer, legal charge and any discharge will need to be registered at the Cayman Islands Land and Survey Department within 45 days following the date of completion, together with any registration fees and stamp duties. Your attorney can attend to this for you.
This article first appeared in the August 2020 print edition of Camana Bay Times with the headline "Holding real property in Cayman."